Over the past several years an international network of networks known as the Internet has become increasingly popular. The Internet allows millions of users throughout the world to communicate with each other. To provide users with easier access to information available on the Internet, a World Wide Web has been established. The World Wide Web allows information to be organized, searched and presented on the Internet using hypertext. Thus, using the World Wide Web a user can submit a query for information and be linked electronically to information of interest which has been stored at Web locations on the Internet. Using hypertext, a user can also communicate information to other users of the Internet. Because of the use of hypertext, the information which can be queried and retrieved via the Internet includes not only textual information but also information in graphic, audio and video form. Web search engines and browsers have been developed to make searching and retrieval of information of interest on the Web a simple task. Hence, the Web has made it relatively easy for virtually anyone having access to a personal computer or other device connected to the Internet to communicate with others who are also connected to the network. This ease of use has resulted in an increase in the number of users utilizing the Internet.
With the proliferation of Internet users, numerous services are now provided over the Internet. One of the first such services to be offered was electronic banking. Electronic banking allows banking customers to access their account information and execute banking transactions, e.g. the transfer of funds from a savings to a checking account, by simply linking to a bank server using the Internet to access account information and communicate transfer instructions.
Electronic banking has advanced from this basic consumer-to-bank communication to a consumer being able to electronically pay bills and make other payment types and fund transfers to others by communicating instructions, via the Internet, to a service provider possibly distinct from the financial institute maintaining deposited or credited funds of a pre-registered payer. The payments are then made to the payee by the service provider. The term “payment” as used herein can include payment of bills as well as other payments not based upon bills. Funds from the payer's deposit or credit account, i.e. the payer's payment account, are debited by the service provider to cover the payment. The payment by the service provider to the payee can be made in any number of ways.
For example, the service provider may electronically transfer funds from the payer's banking account to the payee's banking account, may electronically transfer funds from a service provider's banking account, to the payee's banking account, may prepare a paper draft or check on the service provider's banking account and mail it to the payee, may prepare an electronically printed paper draft on the payer's banking account and mail it to the payee, or may make a wire transfer from either the service provider's banking account or the payer's banking account.
If the funds transferred to the payee are drawn from the service provider's banking account, funds from the payer's banking account are electronically or otherwise transferred to the service provider's banking account to cover the payment. Further, if the payment will be made from funds in the service provider's banking account, the payment will preferably be consolidated with payments being made to the same payee on behalf of other payers.
Accordingly, such electronic payment systems eliminate the need for a payer to write or print paper checks and then forward them by mail to the payee. This makes it easier and more efficient for the payer to make payments. Payees receiving consolidated payments no longer have to deal with checks from each payee and therefore can process payments more efficiently. The making of payments by the electronic or wire transfer of funds provides even further efficiencies in payment processing by payees, and it is well recognized that making payments electronically can significantly reduce the cost of processing payments for both the payer and the payee.
A payer must be a registered user of conventional electronic payment systems. Registration is required to protect a provider of electronic payment services from credit risk. To register a user, the service provider typically obtains and validates information relating to the user to verify the user's identity and processes the obtained information to determine if the service provider will accept the credit risk of making payments on the user's behalf. Registration may be a somewhat simplified process whereby a user submits, on-line, information identifying his or her bank account and financial institution and his or her identity. This information typically includes a name, address, phone number, and other identifying information, or some variation thereof. Other systems require that the potential user supply a voided check from the user's checking account.
Even with the simplified on-line information submittal, the payer is not able to immediately direct payments. After submitting registration information, the user must then wait for the service provider to validate and process the registration information and to receive a confirmation that the registration process is complete. This confirmation is typically sent from the service provider to the registering user via regular mail channels. Due to the processing and delivery time, the registering user is not able to immediately utilize the services of the electronic payment provider. Accordingly, a need exists for a technique whereby a user may immediately register and direct payments in a single on-line session.
A payment service provider benefits from economy of scale. That is, the more users a provider services, the lower the cost of providing those services. Credit risk processing, by design, eliminates potential payers from utilizing the services of a payment service provider. These potential payers, or users, may have a poor, incomplete, or non-existent credit history. As such, a payment service provider may be unwilling to accept the credit risk attendant in providing payment services to these potential users.
Current registration techniques also work against economy of scale another way. Certain potential users of payment services find disclosure of personal credit information unattractive. Because current techniques require that credit histories be processed, many of these potential users do not utilize payment services. Accordingly, a need exists for a technique to provide payment services to potential users, including those with poor, incomplete, or non-existent credit histories and those unwilling to disclose credit information, while shielding a payment service provider from financial risks.
Introduced above, the larger the number of customers a payment service provider services, the more efficiently the payment service provider can operate. Some conventional service providers attempt to entice potential customers to register by offering reduced introductory fees, or other enticements, for providing a payment service. Potential customers, to take advantage of these enticements, are still required to register. As discussed above, many potential users are unable to register due to poor credit histories, or are unwilling to register because of the unattractiveness of disclosing credit information. Additionally, some potential customers are unwilling to register because of the time involved, also discussed above. Accordingly, a need exists for a technique to entice potential new customers to utilize the services of a payment service provider which overcomes the inability or unwillingness of potential customers to register.
Another problem with typical registration techniques is that they are “all or nothing” techniques. That is, potential users are either accepted or denied registration, usually based upon credit risk processing. Conventional techniques do not provide for different levels of service, or privileges. Accordingly, a need exists for a registration technique whereby different users can become registered with different levels of service or privilege.